Proactive moves by new CEO - Q3 review

ITAB’s Q3 looked solid in revenue growth (organic +2% Y/Y) and profit margins against tough Y/Y comparables, with the weak FCF more of a timing effect set to be balanced in Q4e. New CEO Björn Borgman sent a proactive hands-on message on the near-term agenda, strengthening the view of synergy realisation and profit margin expansion potential ahead. We make marginal underlying forecast changes post-Q3, still seeing a solid industrial roll-up story. We have widened our fair value range to SEK18–26.5 (18–25) on relative valuation moves.

Q3 review. Against tough Y/Y comparables, ITAB reported a solid Q3, with 3% revenue growth (2% organic Y/Y), on strong performance in the Nordics and Spain, with stable gross and adj. EBITA margins (7.8%; +1bps Y/Y) for adj. EBITA of SEK266m, up 3% Y/Y and 10% above the company-collected consensus. FCF was seasonally weak on a working capital tie-up for which management sees a normal Q4 release, suggesting more of a timing effect.

Proactive moves. ITAB’s new CEO Björn Borgman seems to be taking a proactive hands-on approach. His near-term focus for ITAB is on dedicated work to improve internal efficiency, realise identified synergies, create active sales efforts close to the customer (prioritising retail tech growth), enhance production efficiency (establish a more flexible cost structure) and reduce tied-up capital. These are all very much aligned with delivery of the earlier-indicated EUR30m synergy potential and raising performance towards the 7–9% EBIT margin target. We make minor underlying forecast changes, with our adj. EBITA for 2026–28e unchanged, but with adjustments to non-cash items lowering our 2026–28e EPS by 4–14%, but more importantly leaving our 2027–28 FCF forecast marginally higher.

Fair value range widened to SEK18–26.5 (18–25), with the range reflecting the potential to create a European market leader in the retail fittings segment. Our valuation blends ITAB’s historical LTM valuation, our relative peer group valuation and a DCF.